Leases

12 Months Ended

Dec. 31, 2020

LEASES

The majority of our facilities are occupied under operating lease arrangements with various expiration dates through 2067, some of which include options to extend the life of the lease, and some of which include options to terminate the lease within 1 year. In certain instances, we are responsible for the real estate taxes and operating expenses related to these facilities. Additionally, we enter into operating leases for certain vehicles and office equipment in the normal course of business. We determine the expected term of any executed agreements using the non-cancelable lease term plus any renewal options by which the failure to renew imposes a penalty in such amount that renewal is reasonably assured. The derived expected term is then used in the determination of a financing or operating lease and in the calculation of straight-line rent expense. Rent escalations are considered in the calculation of minimum lease payments in our capital lease tests and in determining straight-line rent expense for operating leases. Minimum lease payments include the fixed lease component of the agreement, as well as fixed rate increases that are initially measured at the lease commencement date. Variable lease payments based on an index, payments associated with non-lease components and short-term rentals (leases with terms less than 12 months) are expensed as incurred. Consideration is allocated to the lease and non-lease components based on the estimated standalone prices.

We determine if an arrangement is a lease at its inception. Operating leases are included in operating lease right-of-use assets, accrued liabilities, and long-term operating lease liabilities in our consolidated balance sheets. Our financing leases are not material to the financial statements.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities and right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an explicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Rent expense for lease payments is recognized on a straight-line basis over the lease term. The operating lease right-of-use assets also includes any rent prepayments, lease incentives upon receipt, and straight-line rent expense impacts, which represent the differences between our operating lease liabilities and right-of-use assets.

Maturities of operating lease liabilities are as follows:


(in thousands)	December 31, 2020

2021	$	20,187
2022	18,698
2023	13,556
2024	9,810
2025	8,129
Thereafter	39,224
Total lease payments	109,604
Less imputed interest	(14,832)
Total lease liability (current and long-term)	$	94,772

Total minimum future lease payments of approximately $8.0 million for leases that have not commenced as of December 31, 2020 are not included in the consolidated financial statements, as we do not yet control the underlying assets. These leases are expected to commence during 2021 with lease terms of approximately 4 to 13 years.


(in thousands, except lease term and discount rate)	December 31, 2020		December 31, 2019

Weighted average remaining lease term - operating leases	10.3 years		10.3 years

Weighted average discount rate - operating leases	2.9	%	3.5	%

Expenses incurred related to operating leases, excluding variable and short-term leases were approximately $21.7 million and $21.1 million during the year ended December 31, 2020 and 2019, respectively. Total expenses incurred related to operating leases, including variable rent and short-term leases, were approximately $24.5 million, $23.8 million, and $25.2 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Supplemental cash flow information for leases is as follows:


	For the Years Ended December 31,
(in thousands)	2020		2019

Cash paid for amounts included in the measurement of operating lease liabilities	$	19,619	$	20,008
Right-of-use assets obtained in exchange for operating lease obligations, net of early lease terminations	$	26,807	$	13,399